Loss at Triplex Lloyd unit knocks shares

SHARES in Triplex Lloyd, the foundry business based in Birmingham, fell nearly 10 per cent yesterday on news that a subsidiary had fallen into loss, writes Robert Cole.

The problems surprised the City, and shares fell 14p to 130p. They touched 190p in March; in April the company raised pounds 17m in a rights issue pitched at 140p.

ED Hinchliffe, a wall-cladding company, lost pounds 2.3m in the half- year to 30 September because of difficulties with three contracts.

The loss more than halved Triplex group's taxable profits at pounds 1.4m, down 56 per cent from pounds 3.3m last time. At the bottom line Triplex showed a loss per share of 0.1p (3.9p profit).

Norman Price, the main board director responsible for Hinchliffe, has resigned. John Foley, managing director, has taken charge of operations. The subsidiary will lose another pounds 800,000 in the second half.

Analysts reined back profit forecasts for the full year. One, worried by the quality of Triplex's earnings in all parts of the group as well as losses at Hinchliffe, reduced his estimate for pre-tax profits from pounds 9m to pounds 3m. The interim dividend has been held at 2.5p, but expectations are that the year-end payout will be reduced.

Brown & Tawse, the steel stockholder, said extremely difficult market conditions led to an 18 per cent fall in turnover in the six months to 2 October.

The group cut its losses before tax, however, from pounds 2.8m to pounds 2m. Loss per share was 2.7p against a loss last time of 8.5p.